News
Harvard’s Coates on Proposed Securities Law Reforms
John C. Coates IV, professor of law and economics at Harvard Law School, testified before the U.S. Senate Subcommittee on Securities, Insurance and Investment on December 14. In his testimony, Professor Coates took up three themes related to pending proposals to revise securities laws to (among other things) deregulate widely held but unlisted companies and banks, to permit unregistered “crowdfinancing,” and to loosen constraints on small public offerings:
Just How Ready Are We for Swaps Reform?
Just in time for the CFTC and SEC’s final swaps provisions, State Street and TABB Group have published a paper, Charting New Territory: Buy-Side Readiness for Swaps Reforms, based on a survey of buy-side firms examining where the investment community stands on a range of issues arising from global swaps reforms. The paper also looks at the challenges the industry faces as it transforms from an opaque, over-the-counter, bilaterally traded environment to electronic execution and central clearing.
From Earthquakes to Financial Shocks, Contingency Planning is Key to Survival
Inevitably, disasters will happen. They can take many forms, from natural disasters like earthquakes to the purely manmade kind like financial shocks. The occurrences of both in the recent past demonstrates dramatically that how a business prepares for adverse contingencies is key to their survival.
EU Financial Transaction Tax Casts an Extremely Wide Net
On May 23, the European Parliament adopted a controversial financial transaction tax that would impose a 0.1% tax for shares and bonds and a 0.01% tax on derivatives. The language casts a very wide net and would require financial institutions located outside the EU to pay the tax if they traded securities originally issued within the EU, as well as taxing shares issued outside of the EU but subsequently traded by at least one institution established within the EU.
BIS Publishes Its March 2012 Quarterly Review
The Bank for International Settlements on Monday issued its Quarterly Review for March 2012. The Review discusses the global effect of European bank deleveraging and also provides highlights from the latest BIS data sets on international banking and financial activity.
BIS Issues Preliminary 3Q 2011 International Banking Statistics
The Bank for International Settlements has issued preliminary locational and consolidated banking statistics for the quarter ended September 30, 2011.
Volker and Legislators Defend the Volker Rules
Responding to strident criticism of proposed regulations implementing the Volker Rule, former Fed Chair Paul Volker and the Senate authors of the Dodd-Frank Volker Rule provisions defended the rule as absolutely vital and urged the SEC and banking agencies to eliminate unjustified exclusions and exemptions, such as proposed hedging exemptions related to bank investments in private funds.
SEC Chair Lays Out the Future of OTC Derivatives Regulation
In an address in February before the Practicing Law Institute, SEC Chairman Mary Schapiro outlined for the audience the Commission’s plans to build, from the ground up, a new regulatory regime for over-the-counter derivatives. The innovative and heretofore lightly regulated OTC derivatives market has long been seen by Schapiro as a risk to the financial system. In particular, she sees systematic risks posed by: the opacity of the derivatives market; weak or non-existent capital, margin and clearing and settlement requirements; and the concentration of derivative transactions among a relatively small number of institutions.
Is the Evidence There to Revamp Reporting under 13(d)?
Lucian Bebchuk, Professor of Law, Economics, and Finance at Harvard Law School and Robert J. Jackson, Jr., Associate Professor of Law at Columbia Law School have published a paper urging caution and concluding that the SEC should not proceed with a recently proposed tightening of blockholder reporting. While not opposing some re-examination of the blockholder reporting regulatory regime, Bebchuk and Jackson explain that changes should be examined in the larger context of the beneficial role that outside blockholders play in American corporate governance and the broad set of rules that apply to such blockholders.
Beyond Basel. Can We Do Better than Basel III?
Even as countries strive to meet the quickly approaching Basel III deadlines, some fairly influential voices in regulatory policy are wondering aloud if the latest Basel guidelines are up to the task. Thomas M. Hoenig, director of the Federal Deposit Insurance Corporation, in a September 14, 2012 address before the American Banker Regulatory Symposium, raised his concerns that Basel III is based on faulty assumptions and processes, and introduces unworkable complications into an already complex system. Hoenig proposes an alternative, a “back to basics” approach he feels would be more easily monitored and enforced, and represent a better measure of a firm’s ability to withstand financial adversity.